SPAC In Focus: Blockchain Moon Acquisition Corp.

SPAC In Focus: Blockchain Moon Acquisition Corp.


The Crypto/SPAC Frenzy

With Bitcoin, Ethereum, and other cryptos making new all-time highs recently, it's no wonder that SPAC sponsors have taken to raising funds specifically to pursue a deal with a crypto-related company. There have been a number of crypto-related companies announce their intentions to go public through a SPAC deal this year thus far:

  • Cryptocurrency company Circle is merging with Concord Acquisition Corp (NYSE: CND) at a $4.5 billion valuation
  • Crypto mining company Core Scientific is combining with Power & Digital Infrastructure Acquisition Corp (NASDAQ: XPDI) in a deal worth $4.3 billion
  • Bullish, an emerging crypto-startup, intends to go public via Far Peak Acquisition Corp (NYSE: FPAC) at a $9 billion valuation
  • Singaporean crypto-mining outfit Bitdeer announced its intentions to become publicly traded via a SPAC deal with Blue Safari Group Acquisition Corp (NASDAQ: BSAG) that gives the company a value of $4 billion 

These are just a few examples of deals in which crypto-related companies have hit public markets via a special purpose acquisition company.

Another Moonshot?

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More than just a catchy name, Blockchain Moon Acquisition Corp. (NASDAQ: BMAQ) is yet another SPAC looking to strike a deal. According to SPAC Track's active SPAC screener, there are currently 544 other companies looking to do the same. That's a lot of blank checks looking for an acquisition.

According to BMAQ's S-1 registration, they intend "to pursue prospective targets that are in blockchain technology located in North America, Europe and Asia." Led by Enzo Villani, who is "the Chief Executive Officer and Chief Investment Officer of Alpha Sigma Capital, which he joined in January 2020. Alpha Sigma Capital (ASC) is an investment fund focused on emerging blockchain companies that are successfully building their user-base, demonstrating real-world uses for their decentralized ecosystems, and moving blockchain technology towards mass-adoption." Villani makes his views on mass-adoption of cryptocurrencies well-known:

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Clearly someone who knows the space and its potential implications, he recently spoke at a Diffuse digital event. Speaking about the Alpha Sigma Fund, which sponsored the Blockchain Moon SPAC:

We focus only on blockchain in this fund, which I started about 18 months ago. Our biggest achievement in those 18 months is that 11 companies that we invested into have achieved unicorn status. We have 11 unicorns in 18 months, when the average for a venture fund is 1 unicorn in five years. I'm proud of that.

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Interestingly, Mr. Villani uses his LinkedIn and his personal Twitter page to not only promote the benefits of Blockchain technology...

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...but also to promote the stock of his SPAC...

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I guess he must've heard the moon can only be reach via Reddit.

The chief financial officer of BMAQ is Wes Levitt, Head of Strategy at Theta Labs since February 2018. Theta Labs is a San Jose-based software company that developed and launched the Theta blockchain. Levitt is also a partner at Villani's Alpha Sigma Capital. 

Theta is decentralized video delivery network, powered by users and an innovative new blockchain. They have raised a total of $113 million over five rounds of funding.

The directors section of the S-1 pretty much speaks for itself:

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What's clear is that there is certainly no shortage of crypto-related companies suitable for Blockchain Moon Acquisition Corp. and the $100+ million in their trust account. Currently, the units, common stock, warrants, and rights are tradeable:

Each unit consists of one share of common stock, one right and one redeemable warrant.

Each right entitles the holder thereof to receive one-tenth (1/10) of a share of common stock upon consummation of our initial business combination. No fractional shares will be issued in connection with an exchange of rights. As a result, you must hold rights in multiples of 10 in order to receive shares for all of your rights upon closing of a business combination.

"Each redeemable warrant entitles the registered holder to purchase one-half (1/2) of one share of common stock at a price of $11.50 per full share, subject to adjustment as described in this prospectus, and shall expire five years after the completion of an initial business combination, or earlier upon redemption. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares. This means that only warrants in multiples of two may be exercised at any given time by a warrant holder. For example, if a warrant holder holds one warrant to purchase one-half (1/2) of one share, such warrant shall not be exercisable. If a warrant holder holds two warrants, such warrants will be exercisable for one share. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of Delaware law."

Warrants are 2:1

Rights are 10:1

 

What Company Will BMAQ Merge With?

Currently, as of November 22 2021, there is no answer to that question. Online investment communities and social media have already run rampant with rumors. But they are just that...rumors:

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What's clear is that the management team of BMAQ has the industry knowledge and foresight to find a promising target. Whether or not the market agrees with a valuation is another story. But the potential is certainly there for a solid deal to be made.


To read & learn more about SPAC companies, check out the Investopedia article.

This blog post represents my opinion and is not financial advice. I am not a financial advisor, just a rocket enthusiast. Always perform your own due diligence and any trades/investments you do is at your own risk


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